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Will Islamic bonds help revive Egypt's economy?

Some economists say the government's plan to issue dollar-dominated and euro-dominated Islamic bonds will generate more financial resources, while others worry the move strays from Egypt's secular nature.

Economists have mixed reactions regarding the Egyptian government’s plan to issue dollar-dominated and euro-dominated Islamic bonds (sukuk) over the next fiscal year, which began July 1, with the aim of diversifying sources of financing and giving a push to economic stimulation efforts.

In press statements to Bloomberg on June 27, Finance Minister Mohamed Maait made the announcement, expecting that the issuance of the Sharia-compliant bonds would attract huge demand, as it enjoys a large market. Maait further said that the issuance of these bonds only requires a legal framework, adding that the government would introduce amendments to the existing law or draft a new one.

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